For a Checkers franchise, what is the requirement regarding the Operating Partner's authority to bind the franchisee regarding operational decisions?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in Exhibit A as the "Operating Partner" an individual we approve who must: (a) own and control, or have the right to own and control (subject to conditions reasonably acceptable to us) not less than ten percent (10%) of your equity and voting rights; (b) have the authority to make, and bind you and all your Owners to, all operational decisions regarding the Franchised Restaurant; and (c) complete our training program to our satisfaction before engaging in his or her operational duties. You may not change the Operating Partner without our prior written consent.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 64–65)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if the franchisee is a business entity (corporation, partnership, LLC, etc.), they must designate an Operating Partner. This Operating Partner must be approved by Checkers and must meet specific requirements. One of these requirements is that the Operating Partner has the authority to make and bind the franchisee to all operational decisions regarding the franchised restaurant.
In practical terms, this means the Operating Partner has the power to make critical decisions about how the Checkers restaurant is run. This could include decisions about staffing, inventory, marketing, and customer service. The franchisee is bound by these decisions, so it's crucial to choose an Operating Partner who is competent and aligned with the franchisee's business goals.
This requirement ensures that Checkers has a direct point of contact who is responsible for the day-to-day operations of the restaurant and can be held accountable for its performance. It also protects Checkers by ensuring that operational decisions are made by someone who has completed their training program and is familiar with their standards and procedures. The Operating Partner must also own and control at least 10% of the franchisee's equity and voting rights, further aligning their interests with the success of the business.